LifeLock 2013 Annual Report Download - page 7

also covers certain out-of-pocket expenses to the member, such as loss of income, replacement of fraudulent withdrawals, and costs associated with child and
elderly care, travel, and replacement of documents.
In our enterprise business, we deliver on-demand fraud and risk solutions and authentication information about consumers to our enterprise customers
in their daily transaction flows. Our enterprise customers utiliz e this information in real time to authenticate their customers, assess their risk profile, and
enhance the enterprise’s decision making process on which to base account opening, lending, credit, and other risk-based decisions. By integrating our
services into their business processes, our enterprise customers can reduce potential financial losses from identity fraud. Information generated from the
transaction flow at our enterprise customers is transmitted back to our data repositories, which continually enhances the LifeLock ecosystem and helps
strengthen the services we can provide to our customers in the future.

We believe that the LifeLock ecosystem enables us to provide proactive and comprehensive identity theft protection services for consumers and fraud
and risk solutions for enterprises and provides us with numerous competitive strengths that differentiate us and that are critical to ou r success, including the
following:
• . The LifeLock ecosystem includes data repositories that contain over one trillion identity elements,
including personally identifiable information, transaction data, and fraud instances across multiple industries. In addition, our enterprise
customers provide us with an average of over 50 million new identity elements per day. The LifeLock ecosystem is augmented with data from
third-party fulfillment partners and by the feedback from actionable alerts sent to our members through our LifeLock Identity Alert system. We
believe that the breadth and depth of our proprietary data, which has been generated over more than ten years, would be difficult to replicate and
creates a substantial barrier to entry.
•. We believe that the LifeLock ecosystem provides strong network effect benefits to our members and enterprise
customers. Transactions that flow through our enterprise business generate actionable alerts for our members. Our members are then able to
confirm back to us whether or not they are participating in the identified transactions, which creates a bona fide and deterministic check that
enhances the identity information in our data repositories. This feedback loop strengthens our data repositories and creates a network effect that
improves the precision and sophistication of our algorithms as we continue to add more customers, acquire more data, process more actionable
alerts, and analyze more transactions.
•. The LifeLock ecosystem utilizes our patented and proprietary predictive analytics to evaluate current and
past consumer transaction data, analyze connections between personally identifiable information of individuals, and assess the stability and
authenticity of an individual’s identity. We leverage our patented analytics to provide our enterprise customers with a sub-second assessment of
risks associated with transacting based on identity information presented to them. We believe that our analytical capabilities differentiate the
quality and effectiveness of the services we provide and help drive subscriptions by new members and adoption by enterprise customers.
•. The LifeLock ecosystem has enabled us to develop what we believe to be the most proactive and
comprehensive identity theft protection services for consumers and fraud and risk solutions for enterprises. The breadth and depth of our data
and our predictive analytics coupled with the confirmatory alert feedback from our members provides our enterprise customers with a more
effective risk assessment of their customers.
•. We believe that we have the leading brand in the identity theft protection services industry. Ongoing surveys commissioned
by us since 2010 indicate that our unaided brand awareness is between two and three times higher than our nearest competitor. We have developed
our highly recognized brand through our core value proposition, comprehensive service offerings, marketing strategy, and emphasis on customer
service. We believe that our brand awareness, technology, and service offerings contribute to our ability to maintain and grow our leadership
position in the identity theft protection and fraud and risk solutions markets.

Our goal is to be the leading provider of proactive identity theft protection services for consumers and fraud and risk solutions for enterprises. The key
elements of our strategy to achieve this goal include the following:
• . The identity theft protection services industry is large and
expanding and provides a significant growth opportunity. We intend to grow our business by introducing new services and expanding the services
we offer, such as the LifeLock Wallet mobile application. We believe there are many additional areas in which protection and authentication of
personally identifiable information is important, such as password management and protection and tax return fraud protection, and we intend to
explore and consider these markets.
• . We intend to expand our data repositories with valuable and differentiated data from new and
existing enterprise customers and continue to supplement our repositories with data from third-party fulfillment partners. As we grow our
membership base, we expect an increase in the number of alerts and responses to such
4